Govt accused of engaging in 'Celtic Tiger economics' by approving rent increases

Govt accused of engaging in 'Celtic Tiger economics' by approving rent increases

The government has been accused of engaging in “Celtic Tiger economics” by sanctioning rent increases that are more than twice that of wage hikes and of again ruling out freezing rates.

Some 19 new rent pressure zones (RPZ) have been announced for 11 counties, which will see rate increases by landlords limited to 4% annually.

Despite the further attempt by the government to slow the spiralling rates around in towns and urban areas, Opposition parties again called for a rents freeze.

Labour's Brendan Howlin highlighted how the 4% rent rise cap was more than twice the amount that wages have increased.

He noted that the average annual wage for workers had risen by 1.7% between 2016 and 2017 while the national minimum wage had increased by 1.5% year by year.

Rent pressure zones are “not working,” said Mr Howlin. Increases are still too much for tenants and those rises in turn pushed up rates in neighbouring areas outside RPZs, the Dáil heard.

The government was “engaged in Celtic Tiger economics” and “removed from reality,” said the TD.

The 4% cap on rises is still not sustainable as wages were not going up by that much, he added.

The Labour leader called for wages to be increased to match the 4% rent cap or for a temporary, stricter limit of 1% rate rises.

But Communications Minister Richard Bruton, who took Leaders' Questions in the Dáil, said the supply of housing was the main solution and that many landlords were leaving the market.

Areas designed as new RPZs include parts of Meath, Louth, Limerick and Cork.

New figures from the Residential Tenancies Board also show that rents were 8% higher during the first three months this year, compared with the same time in 2018.

The highest average rent is in Dublin at €1,662. Leitrim is the county with the lowest average rent at €537.

Mr Bruton explained that rent pressure zones had been extended to 19 new areas, including Athlone, Dundalk, Trim, Waterford, Limerick, Gorey and Arklow among places.

“This provides protection for people in those areas. The record of the rent pressure zones is that they have helped to contain the growth of rents,” he added.

Mr Bruton also said additional legislation such as criminal sanctions against those who fail to respect rent rates and stronger powers for the tenancies board to investigate landlords would help tenants.

But random RPZs across the country have caused confusion and conflict.

Sinn Féin Cork South Central TD Donnchadh Ó Laoghaire said:

"The rent pressure zone scheme is inadequate for several reasons. That it is not applied to the entire country as a whole is one of them.

"The impact of that in some areas has given rise to serious anomalies.

There is war going on in Cork County Council. As a result of the redrawing of boundaries, two-thirds of a ward in Cork County Council is now in a rent pressure zone and one third of it is not.

"That is causing major confusion.”


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